Nicole LeBlanc and Keith Rollins formed a partnership on March 15. The partners agreed to invest equal amounts of capital. LeBlanc invested her proprietorship's assets and liabilities (credit balances in parentheses). See the table that follows.

On March 15, Rollins invested cash in an amount equal to the current market value of LeBlanc's partnership capital. The partners decided that LeBlanc will earn \(70 \%\) of partnership profits because she will manage the business. Rollins agreed to accept \(30 \%\) of the profits. During the period ended December 31, the partnership earned net income of \(\$ 70,000\). LeBlanc's drawings were \(\$ 41,000\), and Rollins's drawings totaled \(\$ 27,000\).

Requirements 

1. Journalize the partners' initial investments.

2. Prepare the partnership balance sheet immediately after its formation on March 1.5. 

Transcribed Image Text:

LeBlanc's Accounts receivable...... Inventory. Book Values Current Market Values $12,000 $10,000 43,000 31,000 Prepaid expenses. 3,700 3,000 Store equipment 36,000 26,000 Accounts payable (20,000) (20,000)